Even though it is a struggling time for the economy all around the globe, September 2020 has witnessed the Middle East being an adobe for eight unicorns.
According to CB Insight, a business analytic platform, the Arab world has only one unicorn, the UAE-based Emerging Markets Property Group (EMPG) among the 490 unicorns globally. All the other seven Middle East unicorns are based in Israel.
It is said that the prime reason for less number of one-billion-dollar companies in Arab nations is scalability which causes hindrance in the path of startups to become a unicorn even after GCC having a good ecosystem.
The Dubai-based EMPG, valued at $1 billion currently owns OLX Group, KCK Group and EXOR Seeds and its flagship ventures are Bayut.com, Zameen.com, Bproperty.com, Mubawab.ma, Kaidee, Lamudi and Dubizzle.
“One major reason is that the population of the Gulf countries is smaller than Asia, Europe and the US. If we look at Careem, though, it was acquired at a billion-dollar-plus, the size of its business was mainly in other geographies.”
He also added that the Middle East gives a good ecosystem for startups especially in GCC as different authorities provide needed support and the ease of doing business ranking here is also high.
To achieve the $1 billion value companies have to expand beyond the region to countries like India, Pakistan and Africa. Startups should focus to enter into emerging markets to improve the bottom line.
The UAE ecosystem led by Dubai and Abu Dhabi provides required directions, networks and financial support for the growth of startups by associating with other institutions. Some of the major institutions that are supporting startups are Fintech Hive, Intelaq, Dtec, Hub71 and Sheraa.
On Tuesday the Dubai economy made a pact with noon.com a digital marketplace to connect regional startups with the DED Trade license through its Mahali digital store.
This initiative is made by the Dubai economy to give digital support to the startups and entrepreneurs of Emirates to grow their business on online platforms.
The CB Insight report says that the eight unicorns of the Middle East will have an estimated value of $10 billion. Globally, the 490 unicorns have an estimated value of $1.527 trillion.